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Goodyear Tire & Rubber (GT) Faces Debt Scrutiny, Is The Stock Still Undervalued?

Simply Wall St · 3d ago

Goodyear Tire & Rubber (GT) is back in focus after raising about US$2.3b from non core asset sales in 2025, yet delivering only a modest US$592m long term debt reduction.

The latest US$6.21 share price sits against a year-to-date share price return that is down 30.38%, while the 1-year total shareholder return has declined 26.07%, pointing to fading momentum despite a 9.72% 90-day share price gain.

For Goodyear Tire & Rubber, the combination of a weaker 30-day share price return of down 11.66% and deeply lower 3-year and 5-year total shareholder returns of down 52.92% and down 60.57% suggests investors are still reassessing the company after the asset sales, thin 0.8% Q2 2026 segment operating margin and higher interest costs from the US$1.05b senior notes.

Compare Goodyear's balance sheet pressure with a hand picked list of solid balance sheet and fundamentals (52 results) that may better align with your risk tolerance.

Given Goodyear Tire & Rubber's asset sales, slim margins and higher interest bill, the stock now raises a simple question: Do the valuation and potential upside still justify these risks for new buyers?

Most Popular Narrative: 16.7% Undervalued

Goodyear Tire & Rubber's most followed narrative pegs fair value at $7.46 a share, compared with the latest $6.21 close, which implies meaningful upside if those assumptions hold.

The company is actively focusing on premium and larger rim-size tire segments (18-inch and above), launching a significant number of new SKUs globally, which supports a richer product mix and potential for margin expansion as consumer preferences move upmarket. Goodyear's investment in modernizing its manufacturing footprint, digital supply chain initiatives, and the execution of the Goodyear Forward restructuring program (including plant closures and cost reductions) are expected to deliver sustained SG&A and COGS savings, supporting improved net margins and earnings over the medium term.

Read the complete narrative.

Want to understand why this narrative still sees room above today's price despite ongoing losses? The key is how modest revenue growth, margin repair and a low future earnings multiple are stitched together into that $7.46 fair value.

Result: Fair Value of $7.46 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the Goodyear Tire & Rubber narrative also faces real tests, including weaker commercial truck tire demand and intense competition from lower cost Asian manufacturers that could pressure margins.

Find out about the key risks to this Goodyear Tire & Rubber narrative.

Next Steps

With mixed sentiment around Goodyear Tire & Rubber's recent moves, it helps to move quickly, review the numbers yourself and decide what really matters for you as an investor. To see both sides of the argument in one place, start with the 2 key rewards and 1 important warning sign.

Looking for more investment ideas beyond Goodyear Tire & Rubber?

If Goodyear Tire & Rubber feels like only part of your portfolio story, consider broadening your watchlist with other ideas that better match your goals and risk limits.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.